TIMWE IPO: Go or no go?

Author

Diana Sofia Basílio, Paulo Soares de Pinho

Description

This case describes the dilemma faced by Diogo Salvi, founder and CEO of Portugal-based TIMWE, on the day before his company’s second IPO attempt, in May 2012. The Greek sovereign debt crisis deepened and fuelled a sudden fall in the stock price of the only relevant comparable firm, which affected investors’ valuations of the offered shares while raising doubts about the success of TIME’s own IPO. The founder is confronted with choosing between the costs of a cancelled IPO (the second in a short period of time) and the costs of going ahead in the context of a market that suddenly has turned against him.

TIMWE was founded in 2002 by Diogo Salvi and two friends in Lisbon, Portugal. The company initially acted as an intermediary between providers of mobile entertainment content and mobile phone carriers globally, with a strong emphasis on emerging markets. The founders bootstrapped the company effectively, were able to generate profits at an early stage and to attract bank financing for expansion. Later the company diversified its portfolio of services and launched an innovative and popular mobile payment solution while expanding to 75 countries. In 2011 it considered an IPO but was forced to withdraw it. A second attempt was made in 2012.